Speculation Leads to Decline in Bitcoin s Total Percentage of

Cryptocurrency markets

Bitcoin Exchanges / September 13, 2022

Cover imageTo date Bitcoin and cryptocurrency markets have been under-explored

Bitcoin and cryptocurrency markets contain a considerable speculative component and are extremely volatile

We use econophysics models to examine shocks and crashes in cyptocurrency markets

We examine competition between rival cryptocurrencies and find evidence of a spillover from Ripple to Bitcoin

The extent to which law enforcement and government measures can affect Bitcoin markets appears mixed

In this paper we draw upon the close relationship between statistical physics and mathematical finance to develop a suite of models for financial bubbles and crashes. The derived models allow for a probabilistic and statistical formulation of econophysics models closely linked to mainstream financial models. Applications include monitoring the stability of financial systems and the subsequent policy implications. We emphasise the timeliness of our contribution with an application to the two largest cryptocurrency markets: Bitcoin and Ripple. Results shed new light on emerging debates over the nature of cryptocurrency markets and competition between rival digital currencies.


  • Bitcoin;
  • Ripple;
  • Cryptocurrencies;
  • Bubbles;
  • Negative bubbles;
  • Econophysics

Source: www.sciencedirect.com